The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. Total Dirt Bikes $ 917,000 473,000 444,000 $ 263,000 119,000 144,000 Mountain Bikes $ 402,000 202,000 Racing Bikes $ 252,000 152,000 200,000 100,000 70,000 8,400 40,900 20,700 43,908 20,600 7,800 15,500 115,300 40,100 38,600 36,600 183,400 52,600 80,400 50,400 412,600 121,700 167,700 123,200 $ 31,400 $ 22,300 $ 32,300 $ (23,200) Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2 Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented Income statement that would be more useful to management in assessing the long-run profitability of the various product lines Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2 > Kristen Lu purchased a used automobile for $12,300 at the beginning of last year and incurred the following operating costs: Depreciation ($12,300 + 5 years) Insurance Garage rent $ 2,460 $ 1,300 $ 700 Automobile tax and license Variable operating cost $ 340 $ 0.14 per mile The variable operating cost consists of gasoline, oll, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $2,460. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 12,000 miles last year, Compute the average cost per mile of owning and operating the car (Round your answers to 2 decimal places.) Average fixed cost per mile Variable operating cost per mile Average cost per mile $ 0.40 $ 0.40 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in this decision? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as Incorrect.) S Variable operating costs Depreciation Automobile tax License costs Insurance costs